Nat'l Bank of Deposit of City of New York v. Rogers

• Decision Date: 26 March 1901
• Citation: 166 N.Y. 380,59 N.E. 922
• Parties: NATIONAL BANK OF DEPOSIT OF CITY OF NEW YORK v. ROGERS et al.
• Court: New York Court of Appeals Court of Appeals

166 N.Y. 380

59 N.E. 922

NATIONAL BANK OF DEPOSIT OF CITY OF NEW YORK

v.ROGERS et al.

Court of Appeals of New York.

March 26, 1901.

Appeal from supreme court, appellate division, First department.

Action by the National Bank of Deposit of the City of New York against Henry P. Rogers and others, as executors of Nathaniel P. Rogers, impleaded, etc. From a judgment of the appellate division (61 N. Y. Supp. 155) affirming a judgment in favor of plaintiff, defendants appeal. Affirmed.

Appeal, pursuant to section 1336, Code Civ. Proc., from the final judgment entered October 23, 1900, after an order and judgment of affirmance by the appellate division of the First department, entered December 31, 1899, of an interlocutory judgment in favor of the plaintiff entered upon the decision of the trial court upon the trial without a jury. The action was originally brought against John L. Sardy and J. Bard Rogers, co-partners, composing the firm of Sardy, Coles & Co., and Nathaniel P. Rogers, their assignee, to recover the possession of certain merchandise which the complaint alleged Sardy, Coles & Co. had pledged to the plaintiff to secure the payment of their demand note of $3,000, given to the plaintiff for a loan by the plaintiff to them of that sum. The sheriff seized the goods, delivered them to the plaintiff, and it has retained them or their proceeds. The defendant J. Bard Rogers demurred, and his demurrer was sustained, and he ceased to be a party. John L. Sardy did not appear or answer. Nathaniel P. Rogers interposed an answer, and died before the trial. His executors, the present defendants, were substituted in his place. The trial followed, resulting in a judgment for the plaintiff, which was reversed by the appellate division, February 26, 1896, and a new trial granted. The ground of the reversal was that the plaintiff never had the legal title or right to the immediate possession of the merchandise. The court, in its opinion, said that the plaintiff probably had the right in equity to enforce its lien and recover possession. Bank v. Rogers, 1 App. Div. 623,37 N. Y. Supp. 365. June 26, 1896, the plaintiff procured an order allowing it to amend its complaint, and it did so, changing the action into an equitable one to establish its lien upon the merchandise, adjudge its possession thereof acquired under the seizure of the sheriff valid, and alleging that the defendants had disposed of some of the goods, asking an accounting and judgment. The defendants' answer was, in effect, that Sardy, Coles & Co. never gave the plaintiff any lien upon the merchandise, and that they made a valid assignment thereof to Nathaniel P. Rogers before the plaintiff asserted any lien thereon. The plaintiff recovered upon trial, and from the final judgment entered after affirmance by the appellate division of the interlocutory judgment the defendants appeal. The complaint upon which this trial was had, after alleging the incorporation of the plaintiff, alleged that on the 31st day of August, 1891, the plaintiff loaned to the defendants John L. Sardy and J. Bard Rogers, composing the firm of Sardy, Coles & Co., $3,000, for which said firm gave its demand note, secured by ‘its pledge, or agreement to make a pledge, to this plaintiff of the following described goods and chattels,’ of the value of over $3,000, describing the goods, and annexing a copy of the note and instrument of so-called ‘pledge,’ and alleging that the plaintiff then intrusted the goods to said firm to sell for the plaintiff, subject to the plaintiff's right to cancel the trust and take possession of the goods, annexing that instrument, and alleging that the goods were then in the customs house in New York subject to the payment of duties; that the firm on September 4, 1891, paid the duties from the moneys so loaned to it by the plaintiff, and took possession of the goods, and held them under said trust, but on September 23, 1891, sold and transferred to the original defendant, Nathaniel P. Rogers, certain merchandise and other personal property, not including the goods in question, whether plaintiff duly notified him, he to convert them into money and pay certain debts, and return the balance to the firm; that said Nathaniel, however, wrongfully took these goods, less a portion thereof which the firm had already sold, but the money for which the said Nathaniel afterwards collected; that after such assignment the plaintiff canceled the trust, and demanded of him said goods and money, which demand he refused; that at the time this action was commenced the sheriff of the city of New York took possession of some of the goods, and handed them to the plaintiff, upon the plaintiff's giving the usual undertaking in replevin; that the defendants did not rebond the same, but retained the plaintiff's bond; and thereupon asked judgment establishing the plaintiff's equitable right to have the goods delivered to it in pledge and recover and retain the goods or their value, that its replevin bond be canceled, and for an accounting for the goods sold by the firm, and moneys collected therefor, in satisfaction of plaintiff's demand.

Thaddeus D. Kenneson, for appellants.

Ambrose G. Todd, for respondent.

LANDON, J. (after stating the facts).

The defendants' exceptions raise the question whether the complaint states a cause of action, and, if these exceptions be sustained, whether the trial court erred in postponing their motion to dismiss the complaint, and meantime receiving, notwithstanding the defendants' objections, evidence in proof of facts material to a cause of action, and then directing the complaint to be amended to conform to the proofs. There is no allegation in the complaint that the demand note had not been paid, and this objection is presented by the defendants' exceptions. The note was in these words: ‘$3,000. New York, Aug. 31, 1891. On demand, after date, for value received, we hereby promise to pay to the National Bank of Deposit of the City of New York or order, at said bank, three thousand dollars, with interest at the rate of six per cent. per annum until paid, having deposited with said bank, as collateral security for the payment of this note, and also as collateral security for all other present or future demands, of any and all kind, of the said bank against the undersigned, due or not due, the following property, viz.’ Then follows a clause to the effect that Sardy, Coles & Co. did then and there actually deposit twenty-eight cases of merchandise, describing it, with the plaintiff, in pledge as security for the payment of the note, with power, upon its nonpayment, to sell the same, and pay the note from the proceeds. The name of ‘Sardy, Coles & Co.’ was subscribed at the end of the note and pledge attached. Sardy, Coles & Co. gave the plaintiff a paper of the same date, in these words: ‘Received of the National Bank of Deposit the following goods and merchandise, specified in the bill of sale dated Aug. 31st, marked and numbered as on memorandum dated Aug. 31st, 1891, herewith attached; and in consideration thereof we thereby agree to hold said goods in trust for said bank, and as their property to sell the same for their account; and further agree, in case of sale, to hand the proceeds to them to apply against any indebtedness to said bank on our account under loans on our account, and for payment of any indebtedness of ours to said bank. The National Bank of Deposit may at any time cancel this trust, and take possession of said goods, or the proceeds that may be found; and in the event of any suspension or failure or assignment for benefit of creditors on our part, or of the nonfulfillment of any obligations, or of the nonpayment at maturity of any indebtedness made by us under said consignment by the National Bank of Deposit on our account, or of any indebtedness to said bank, all obligations, acceptances, indebtedness, and liabilities whatever shall thereupon (with or without notice) mature, and become due and payable. The said goods while in our possession shall be fully insured against loss by fire. New York, Aug. 31st, 1891. Sardy, Coles & Co.’

If the question were presented upon demurrer, we should probably hold the omission of the allegation of nonpayment to be fatal to the complaint. Lent v. Railroad Co., 130 N. Y. 504, 29 N. E. 988. But in such case an amendment upon terms would be permitted. Where the defendant reserves the objection until the trial is moved, if the objection is sustained it is no error for the court to refuse to dismiss the complaint; it may permit the amendment. Such amendment supplies ‘an...